WPS 2015-03: Taking Foreign Preferences into Account: The Rulemaking Process in the United States and the European Union

Ayelet Berman

In our globalized economy, one country’s policies and regulations can significantly affect people outside its borders. If those policies do not violate international law, positive international law does not require that the regulating country be accountable to the foreign stakeholders, except in rare situations. In this paper, Dr. Ayelet Berman shows that despite the lack of legal obligation, rule-making processes in the United States and in the European Union are opening up towards third states and foreigners. Their processes allow foreigners to participate in notice and comment procedures, and the regulatory impact assessments include also the impacts on the foreigners. In the absence of any international legal obligation, the paper traces two main rationales for practice: The enlightened self interest of the U.S. and the EU in improving market-openness, and a sense of moral obligation toward poor countries. Finally, the paper suggests that the mechanisms for including foreigners’ interests, having been embedded now in the OECD’s Best Practice Principles for Regulatory Policy suggests that they will find their way into the domestic regulatory systems of other countries (if they haven’t done so thus far).

Ayelet Berman US EU Rule Making Process WPS 03-15